Sum up of the week, FX, Fixed Income futures

Let me start reviewing the macroeconomic figures we saw this week. We have seen very good data, I’d like to highligh the US GDP, US consumer confidence, EUR manufacturing PMI, GBP manufacturing PMI, US ISM PMI. All of them showed better figures than expected.

                                                                                                    Current  Expected Previous

        US GDP (QoQ) (Q1)                                  1.1%        1.0%      0.8%                     

        US CB Consumer Confidence (Jun)           98.0         93.3       92.4

        US Pending Home Sales (MoM) (May)     -3.7%      -1.1%     3.9%

        German Retail Sales (MoM) (May)            0.9%        0.7%     -0.3%    

        German Unemployment Change (Jun)       -6K          -5K        -10K      

        German Unemployment Rate (Jun)            6.1%        6.1%      6.1%

        GBP GDP (YoY) (Q1)                                2.0%        2.0%      2.0%

        EUR CPI (YoY) (Jun)                                 0.1%        0.0%      -0.1%

        German Manufacturing PMI (Jun)              54.5         54.4       54.4

        EUR Manufacturing PMI (Jun)                   52.8         52.6       52.6       

        GBP Manufacturing PMI (Jun)                   52.1         49.9       50.1

        USD ISM Manufacturing PMI (Jun)           53.2         51.4       51.3

Obviously, the Brexit effect is not reflected in this indicators yet. I’m excited to see how it can affect the different economies.

The governor of the Bank of England has told markets to expect a cut in interest rates and the possibility to implement monetary easing. Having said that, he warned that the monetary policy cannot inmediately offset the implications of a large negative shock. This explains why all the indices closed up this week. In my opinion the most important markets can rise a little bit more, but having in my mind the doubts about China, the Brexit implications, the future of the EU, I think the markets will go down sooner or later. It’s an artificial growth, let me explain my perspective, all the monetary policy applied by the central banks let the stock market raise. There is a lot of complacency in the markets, and events like the brexit creates a lot of volatility and increases the fat tailed risk.

Today, I going to start with the fixed income futures (10Y T-Note and the Bund). As you can think the 10Y T-Note future raised this week.

    10Y T-Note future, 1 day

The Bund’s future has tried to break the 167.27 but apparently there are a lot of traders willing to sell around this level. We should focus in how the situation evolves.

    Bund future, 1 day

FX futures

The EUR raised vs the USD, maybe the main reason of this movement is that the FED won´t raise interest rates at least until August – September. In my opinion the EUR/USD should look for lows, because the US macroeconomic is strong and there is a lot of uncertainty in the eurozone after the decision taken by UK. George Soros warned the European Parliament that the Brexit has unleashed financial crisis and that Europe should be united.

    EUR/USD future, 1 day

Even with the Little rebound in Tuesday and Wednesday, the GBP plunged on Thursday.

    GBP/USD Future, 1 day

The sterling pound plunged against the euro. It’s difficult to make a good forecast, but I think that the GBP will keep falling a Little bit.

    EUR/GBP Future, 1 day

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